With Singapore Straits Times Index closing more than 6% lower, one cannot help but feel a crisis may be coming up. In this post, let us dissect Singapore’s economy as a whole.

The reason for today’s fall mainly stems from the crisis in United States. United States under Bush administration seems to falter when it comes to managing the economy. The package which was announced by Bush on Friday didn’t seem to go well with the financial pundits.

Markets across the globe suffered some heavy losses today. Singapore economy is heavily reliant on United States economy. This was clearly seen with its December industrial output knocking off a double digit drop and its economy contracted in the last quarter.

However, inflation is at an all time high. With a renewed interest in property speculation, Singaporeans may be feeling the pinch living in the island republic. Transportation has risen in all segments from private vehicles, the ever increasing ERP to public transport such as cab fares are all on the rise. Food stuffs are up and so are your many government related services fees.

Nonetheless we read on a daily basis on how rich some sectors are. With the recent festivals, the goverment controlled media reports how the citizens are getting richer as hampers are getting more expensive and contained many delectful and rare items. Top restaurants are fully booked at record prices to celebrate the coming Chinese New Year.

So where exactly is Singapore at? The question is not really whether Singapore will survive the current crisis but rather how many Singaporeans can survive. The segmentation of Singaporeans into two camps of “doing very well” and “doing badly” seems to become more evident as the rich are coping very well and do not feel the pinch whereas the majority heartlanders are feeling the pain and suffering living in a rather expensive environment with very low salary.